Stanford: ‘There is no Ponzi scheme’Emotions are high during financier's first interview

R. Allen Stanford denies claims his Antiguan bank was a Ponzi scheme, saying the company "had far more assets, solid assets, cash and other assets that could cover all our liabilities worldwide."

Photo By Mayra Beltran/Chronicle

Stanford said he's upset by the damage the government and a court-appointed receiver have done to his companies, his investors and 5,000 employees worldwide. "This is not the United States of America. Things like this shouldn't happen," he said.

Photo By Mayra Beltran/Chronicle

Stanford said there were $5 billion in assets in the portions of Stanford Financial Group's brokerage business that Oppenheimer took over since the company has been under a court-appointed receivership.

Photo By Mayra Beltran/Chronicle

Stanford says all his bank accounts and the credit cards in his wallet, issued by banks his company started around the world, are frozen, leaving him to rely on friends and family for support.

R. Allen Stanford said Monday knowing the details of how his company handled billions of dollars in investors’ money wasn’t part of his job, but making injured clients and employees whole again following the government’s “disembowelment” of his businesses has become his top priority.

Stanford spoke to the Chronicle on Monday from the Houston offices of Dick DeGuerin, an attorney he hopes to officially hire if his frozen assets or insurance money are released.

“As God is my witness,” Stanford said, “there is no Ponzi scheme, there was no intentional fraud.”

He said he didn’t know a lot about the details of investments made with funds from certificates of deposit issued by the Antigua-based Stanford International Bank, but he said he trusted those who did.

“I can’t give you specifics because I didn’t get into specifics,” he said. Stanford noted several times that Chief Financial Officer James Davis oversaw the investment decisions for the largest chunk of the investors’ money that the government claims is at the heart of the Ponzi scheme claims.

Stanford said, as far as he knew, no one purposefully did anything illegal.

“Now, I’m not the chief financial officer, I’m not on the investment committee, I’m not making the investment decisions per se, but all the reports that I got, everything that I saw and that I touched over the years was real,” Stanford said.

He characterized himself as more of a “developer and a builder and a visionary, an entrepreneur who wants to see something grow.”

The tall Texas native who has counted on friends and family since his company was taken over in February sometimes became teary-eyed during the hourlong interview.

He was often emotional when talking about the plight of his ex-employees, tossed out of work by a receiver appointed when the Securities and Exchange Commission sued. Stanford said he does not want sympathy .

Stanford said in hindsight, when Wall Street crashed, his companies should not have allowed so many customers to cash out of their CDs and sap the bank’s liquidity. He said he was “surprised” by some of the investments in the third, least liquid tier of the CD funds, but he would not be specific.

Stanford sported the company eagle pin on the lapel of one of the three suits he said he still has. He said he plans to open a Houston office with ex-employees to fight what’s happened.

On Feb. 17, the SEC began taking control of Stanford’s business empire, including the Houston-based brokerage Stanford Financial Group and Antigua-based Stanford International Bank. They also froze the personal assets of Stanford, CFO Davis and Chief Investment Officer Laura Pendergest-Holt.

Stanford now has a wallet full of useless credit cards from his banks and an attorney he can’t pay. He is also angry and frustrated over what he believes is the way the government has sold off or destroyed the companies it took him 25 years to build.

“I want to get everybody back whole,” he said. Stanford said he wants to fight for his investors, his employees, his children, his family and himself.

Stanford also said he thinks he was a target because he was a colorful Texan with a bank in the Caribbean and that he’s been held to a different standard than big American banks.

“I guess somebody is looking for a moose head,” he said, referring to a hunting trophy. “I’m a maverick rich Texan, so I’m a pretty colorful moose head to put on the wall.”

In its civil suit, the SEC claims Stanford and Davis ran an $8 billion Ponzi scheme, luring investors to put money in bank CDs that paid interest rates well above the market’s average performance. The complaint alleges Stanford and Davis decided on a predetermined return on investment and reverse-engineered the bank’s financial statements to report investment income the bank did not actually earn.

In its civil suit, the SEC claims Stanford and Davis ran an $8 billion Ponzi scheme, luring investors to put money in bank CDs that paid interest rates well above the market’s average performance. The complaint alleges Stanford and Davis decided on a predetermined return on investment and reverse-engineered the bank’s financial statements to report investment income the bank did not actually earn.

Stanford and Davis also engineered a bogus $1.6 billion loan to Stanford, the complaint alleges, and put an undetermined amount of the funds into “speculative, unprofitable private businesses controlled by Stanford.”

Stanford said Monday the CD interest rate was not sky-high, just a few points above that of U.S. banks. He also said the loan allegations were not true and he never squirreled money away from the Stanford companies for himself before the company fell.

Neither Stanford nor Davis has been charged with a crime. Pendergest-Holt has been accused of and denies lying to investigators.